The Difference Between Term and Whole Life Insurance

Life insurance can be called as death protection and the main benefit of this is giving your family compensation based on the agreement if you die because of something unexpected. Though you may think if this protection exchanges your life with money, but you can’t debate anymore that it is the most important thing for everyone’s life. However, there are two common types of life protection you can choose and know the difference.

Which One You Choose, Term of Whole Life Insurance?

As you know, you need to observe and find out which one is your best protection between term life and also whole life as the following:

Term life protection

Based on the name, term life is created to give specific protection especially financial condition for certain period of time. The common period many people use is 10 or 20 years. The consumer will pay for the premium payment and the amount will not change higher during the coverage period you choose. However, if the policy reaches the end of period, the company will give you 2 choices. First, you can end the coverage and get your money back. Second, you can continue to extend the coverage but usually the premium payment is little bit higher than before. But you need to know if this protection is usually cheaper than permanent life protection. It will cover your loss the potential income especially if you are the one who work for the family.

Whole life protection

Similar with term life protection, this will cover your financial loss without time limit. You may call it as permanent life protection. Sometimes, many companies set the time limit during your lifetime. Because it will provide your lifetime, so you must pay higher for the premium payment. Though it is expensive, but you will pay in the fixed value with no changes since this is for your lifetime coverage.

After knowing the difference between term life and whole life insurance clearly, you may choose the best one which is suitable with your budget and also need without burdens.